St Sidwell’s Point, Exeter Bus Station, & Exeter City CentreNovember/December 2018

Presentation and Recommendations

1

Bus Station Leisure Complex

2

Initial Scheme with the Crown Estate/TH Real Estate

Crown Estates Development

Bus Station

Leisure

Centre

Approved Crown Estate scheme

4

The response following Crown Estates withdrawal

• In September 2017, the Crown Estates and TH Real Estate decided they would not be progressing with

their proposed developed (Princesshay Leisure) as previously planned.

• The Councils response at the Extraordinary Council meeting 12th October 2017 was to confirm its

ongoing commitment to redeveloping this key strategic city centre site.

• Work has progressed on:

a) Designing the interface works required to ensure the new bus station and leisure complex could be fully functional whilst also according with the original design philosophy of the site – to ensure the future site wide development could still achieve the underlying principles of the development.

b) potential opportunities to develop the remainder of the site.

c) Retendering the projects, including the required interface works

5

Dealing with the Interface Issues

Identifying the Interface Issues

The delayed development of the remaining site resulted in the Bus Station and Leisure Complex buildings sitting on the existing site topography – with challenges around access, site levels and external cladding / appearance

Addressing the Interface Issues

Service diversions, gas, electricity, telecomsSewer diversionElectricity sub-station

8

Addressing the Interface Issues

Addressing the Interface Issues

10

Outcome of the Tender process for the Leisure Centre and Bus Station projects

• Two – stage open book tender using public sector framework

– Initial mini-competition reduces contractors from 10 to 3.

– Contract terms, contractor’s direct costs and profit agreed in competition and best value contractor selected.

– Work with best value contractor via open book process to tender all necessary sub-contractor packages (each sub-contractor package in competition).

– Agree programme based on sub-contractor returns (more robust information)

– Jointly manage risk mitigation & remove uncertainties via enabling works

• The resultant cost being the market price for this project using the best value Contractor

11

Tender Process

• Tender Achievements

– Contractor committed to build and achieve Passivhaus (significant risk of not obtaining a contractor for this project removed)

– Ground works risk now with contractor, not client (greater cost and programme certainty)

– Significantly reduced provisional sums for services and utilities as diversions carried out under enabling works (greater cost and programme certainty)

– Contract includes new interfaces (to accommodate The Crown Estate project demise)

– Contract includes for site wide infrastructure such as the substation.

The proposed contract is a more robust cost and programme to carry out the works than alternative tender

arrangements would have achieved.

12

Tender Process

13

Build Contract Price

£34.9m

Leisure Centre Cost

ProjectCosts 1

£7.1m

Programme

Costs 2

£1.8m£43.8m

Leisure Complex & swimming pools

2. Landlord and tenant obligations and estate matters, telecomm masts, operator procurement, communications etc

1.Design team fees, professional fees, planning, building control, Passivhaus institute approvals, procurement of contractor, legal

fees, enabling works such as ground investigations, demolition works, hoardings etc.

14

Build Contract Price

£5.85m

Bus Station Cost

ProjectCosts 1

£1.35m

Programme

Costs 2

£0.8m£8m

Bus Station

2. Interim bus & coach arrangements, shelters, TROs, highway amendments etc

1.Design team fees, professional fees, planning, building control, procurement of contractor, legal fees etc

Confidential 15

Three options reported to Extraordinary meeting of Council in July 2017

Option adopted

16

Proven Cost v Budget Allocation

0

5

10

15

20

25

30

35

40

45

1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019

£m

Budget

Allocation

Inflation in Period £2.56m (7.4%) (source: BCIS)

+11% (6% on 2nd tender)

Value

Engineered

scheme in

July 2017.Contractor

failed to

agree.

Competitive

single stage

tender with

client taking ground risk

Competitive two-

stage open book

tender.

As original with simplified roof form

and envelope.

Remaining site

interfaces added.Contractor now

taking ground risk.

Budget

Realignment

17

Funding

18

The approved budget for the leisure complex and bus station is £39.92m

The additional cost of delivering both projects is £11.88m

Bringing the total to £51.8m

The Council has ring fenced income from new homes bonus, community infrastructure levy (CIL), Section 106

agreements and capital receipts for the purpose of delivering the leisure complex and bus station. This amounted to £33.65m

The additional funding required to deliver this project can be achieved without negatively impacting on the Medium

Term Financial Plan and will not increase the Council’s already identified saving requirement / commitment over the coming years.

How?

Income from the operator; Restructuring of Council wide loans: short term / long term commitments & rates;An annuity approach instead of a straight-line capital and interest repayment

19

Leisure Centre and Bus Station projects in Context

Strategic Projects

• Shape the future of the city• Ensure the economic sustainability of the

City Centre• Positively contribute to the ongoing

financial well-being & stability of the

Council as a business / organisation• Income critical to the viability of the city

council: car parking, commercial rents,

business rates

Operational

Projects

Community

Benefit Projects

Improve the council’s operational effectiveness and deliver efficiencies. Streamline services. Comply with changes in legislation. Maintain existing facilities.

Improve public / community facilities. Positively contribute to social well-being and / or environmental matters in the city.

The opportunities for the wider Sidwell Street/Paris Street site

The opportunities for the wider site

JLL were appointed to consider a market-led scheme for the wider site. They have identified the demand and potential to deliver the following:

250 units of Private Rented Sector Housing PRS (Built to rent), five stories over: Retailing 39,000ft2 fronting Sidwell Street Food & Beverage 15,500ft2 Roman Walk

4* hotel, 10 storey tower, 175 rooms, 83,400 ft2Office units, 8 stories, 193,900 ft2 Flexi work space, alongside the leisure centre, 27,100ft2

250 market housing units 150 2 beds, 100 1 beds (184,200ft2) on the civic centre siteA new civic centre 52,000 ft2Pavilions 2 units of 4,800 ft2

Public realm enhancements: new square Paris Street, new civic space

22

Proposed Development Schedule

Blocks GIA sf Units Car parking Parking Ratio

New homes for market rent A, B & C 138,560 163 105 64%

New homes for market sale F 128,965 166 92 55%

Affordable homes A, B, C & F 114,653 177 90 51%

Total new homes 382,178 506 286 57%

New Office Quarter E1 100,255 - 87 87%

E2 93,646 - 82 87%

Tech / flexi space E3 27,125 - 24 87%

New Civic 'Hub' D 52,313 - 46 87%

Total office floor space 273,339 238 87%

4* hotel A 83,400 175 39 47%

Mid-scale / budget hotel C 52,860 80 10 19%

Retail / leisure uses A, B, C & D 59,413 - 10 17%

Total commercial floor-space 195,673 255 59 30%

Overall totals 851,190 583 68%

Princesshay content compared with Sidwell St/Paris

Street

530,000 ft2 mixed-use scheme including:

Debenhams anchor store 130,000 ft2

6 MSU’s - 107,000 ft2

60 new shops - 200,000 ft2

Total of 437,000ft2 retailing [compared with

39,000 ft2 at Sidwell St/Paris St]

122 city centre apartments [compared with

500 residential units at Sidwell St/Paris St]

Restaurants and cafes

extensive public realm/ landscape

improvements

851,190 ft2, mixed use scheme:250 units of Private Rented Sector Housing PRS (Built to rent), five stories over:

Retailing 39,000ft2 fronting Sidwell Street Food & Beverage 15,500ft2

Roman Walk4* hotel, 10 storey tower, 175 rooms, 83,400 ft2, Budget hotelOffice units, 8 stories, 193,900 ft2

Flexi work space, alongside the leisure centre, 27,100ft2250 market housing units 150 2 beds, 100 1 beds (184,200ft2) on

the civic centre siteA new civic centre 52,000 ft2Pavilions 2 units of 4,800 ft2Public realm enhancements:

new square Paris Street, new civic space

£225m total development cost

Wider site 851,190ft2

St Sidwell’s Point 65,552ft2

Bus station 9,139 ft2

Total of 925,881 ft2

Confidential 24

25

Bampfylde Street

26

Paris Street

27

Key findings from JLL

28

• Site capacity for 80,000 sqm (851,190 ft2) of residential and commercial floor-space

• Strong demand from Build to Rent / Sell residential sectors focussed on this site / location

• Opportunity to create new prime office quarter anchored by re-provided ‘Civic Hub’

• Lease-back ‘wrapper’ annuity lease as funding mechanism for new offices & Civic Hub

• Hotel demand to support up-scale 4* hotel and life-style / budget hotel

• Optimum balance and mix of uses to capture this demand

• Market risks and delays that could erode this opportunity

• Importance of a collaborative approach with key stakeholders to mitigate these risks

• Delivery options and outcomes with associated risks and returns

• Recommended Actions to promote the opportunity and make it happen

29

In April 2018 Marketing Means conducted a survey :

The most important aspects of a new entertainment venue were felt to be that it is multi-purpose (rated very important by 78%),

and can offer multiple stage configurations/ flexible seating/standing (very important to 72%).More than three-quarters of respondents (77%) stated that any new

entertainment venue in Exeter should be built in the city centre.

In January 2017 Fourth Street carried out a needs assessment for a new entertainment venue in Exeter

There is an opportunity for developing a venue with a mixed-programme and capacity of around 1,200 seated, which could be reconfigured to a standing venue of say, 2,000 to 2,500 capacity

Capital funding normally a cocktail of funding with significant contributions typically derived from public, lottery and third sector sources. Capital funding can often be secured – problem often revenue requirements

A multi-purpose performance venue for the city centre

30

Recommendations

Recommendations 1 & 2

• Welcome the conclusions of Jones Lang LaSalle (baseline appraisal)

• Authorise the City Surveyor to progress work to identify options and a preferred development partner for a comprehensive scheme for the redevelopment of the wider

Sidwell Street/Bus Station site (including options for the redevelopment of the Civic Centre site, Paris Street)

• Fund up to £300,000 to cover the associated costs of this work.

Recommendation 2

• Fund up to £90,000 to cover the costs associated with exploring the potential and opportunity to provide a multi-purpose performance venue as part of the wider

development of Sidwell Street/Paris Street.

31

Recommendation 1

Council allocate an additional £11.88m to cover the programme costs and contract price of building a new leisure complex and

bus station.

Recommendation 3

Any Questions ?

33